SB 1165 California Senate · 2025-2026 Regular Session

Contractor licenses: outstanding liabilities assessed by the California Department of Tax and Fee Administration.

Summary

Existing law, the Contractors State License Law, establishes the Contractors State License Board and sets forth its powers and duties relating to the licensure and regulation of contractors. Existing law requires the board to appoint a registrar of contractors, as specified, to serve as the executive officer and secretary of the board. Existing law permits the registrar to suspend or refuse to issue, reinstate, reactivate, or renew a license for a failure to resolve all outstanding final liabilities, including taxes and any fees that may be assessed by, among others, the State Board of Equalization and the Franchise Tax Board. Existing law exempts from that provision the outstanding final liabilities assessed by the State Board of Equalization of a licensee who has entered into an installment payment agreement with the State Board of Equalization, as provided. Existing law, on July 1, 2017, transferred to the California Department of Tax and Fee Administration various duties, powers, and responsibilities of the State Board of Equalization. This bill would update the above-described outstanding liability enforcement provisions of the Contractors State License Law to include references to the California Department of Tax and Fee Administration, as specified. The bill would require the installment payment agreements with the State Board of Equalization or the department to be in writing. The Contractors State License Law requires the application for a contractor's license to include an authorization by the applicant for the Franchise Tax Board to disclose the tax information that is required for the registrar to administer the outstanding liability enforcement provisions, as specified. Existing law authorizes the Franchise Tax Board to audit these authorizations. This bill would revise the application requirements to include a similar tax information disclosure authorization for the department, as specified. The bill would also authorize the department to audit these authorizations.

Bill status signed all 5 stages cleared

Introduction

Feb 2026

Committee Review

Aug 2026

Senate Passage

May 2026

Assembly Passage

Aug 2026

Signed into Law

Aug 2026

Introduced Feb 18, 2026 Signed Aug 17, 2026

Maddy AI version diff · 5 comparisons

What changed between versions

08/17/26 - Chaptered → SB1165 · 1 edit

MINOR

No substantive policy changes were made. The diff reflects a reformatting of the same enacted bill text (Chapter 111, SB 1165) from a traditional chaptered document layout into a web page presentation with navigation elements such as links to FAQ, sitemap, and bill tracking tools. The statutory language of Section 7145.5 of the Business and Professions Code is identical in both versions.

TECHNICAL

The bill text was reformatted from a chaptered document with page numbers and traditional headers into a web page layout with navigation menus, quick search fields, and version tracking links. No changes to the actual statutory language or legislative counsel's digest.

04/16/26 - Amended Senate → 08/07/26 - Enrolled · 4 edits · Aug 7, 2026

MODERATE

The Enrolled version of SB 1165 removed several provisions that had been added in the Amended Senate version. Specifically, it eliminated the California Department of Tax and Fee Administration's (CDTFA) authority to proactively request license suspensions or refusals for outstanding tax liabilities, the associated written notice requirements to licensees, and CDTFA's power to prescribe regulations for administering the section. The bill now relies solely on the registrar's existing authority to act on outstanding final liabilities, with CDTFA's role limited to providing tax information through the disclosure authorization in the license application.

Scope change

The bill's enforcement scope narrowed: CDTFA lost its proactive role in triggering license actions and its regulatory authority. The department retains a passive role through the tax information disclosure authorization in the license application (section 7145.5(d)), but can no longer independently initiate suspension requests or create implementing regulations.

ENFORCEMENT

Removed CDTFA's ability to request that the registrar suspend a license or refuse to issue, reinstate, reactivate, or renew a license for outstanding final liabilities assessed by CDTFA unless the licensee had a written installment payment agreement in compliance.

Removed CDTFA's authority to prescribe, adopt, and enforce regulations relating to the administration and enforcement of Section 7145.5.

REQUIREMENT

Removed the requirement that CDTFA give written notice to a licensee of its intent to request a license suspension or refusal, including detailed service methods (personal delivery, mail, or secure electronic transmission) and mailing procedures.

TECHNICAL

Section 7145.5(e) was restructured from a multi-paragraph provision with sub-paragraphs (e)(1) through (e)(4) into a single paragraph (e) containing only the installment payment agreement exemption, reflecting the removal of the other sub-paragraphs.

02/18/26 - Introduced → 03/23/26 - Amended Senate · 8 edits · Mar 23, 2026

MODERATE

The bill was substantially expanded from a narrow nonsubstantive property tax cleanup into a significant contractor licensing enforcement measure. The amended version adds new authority for the California Department of Tax and Fee Administration (CDTFA) to trigger suspension or refusal of contractor licenses when licensees have outstanding tax liabilities, mirroring powers previously held only by the State Board of Equalization. This gives CDTFA a powerful compliance tool to collect unpaid taxes from contractors.

SCOPE

Added an entirely new Section 1 amending Business and Professions Code Section 7145.5, expanding the list of agencies whose outstanding liabilities can trigger contractor license suspension to include the California Department of Tax and Fee Administration (CDTFA), in addition to the previously listed State Board of Equalization.

ENFORCEMENT

CDTFA may now request that the registrar suspend or refuse to issue, reinstate, reactivate, or renew a contractor license when a licensee has an outstanding final liability assessed by CDTFA and has not entered into a written installment payment agreement.

CDTFA must give written notice to a licensee before requesting license suspension, which may be served personally, by mail, or by secure electronic transmission. The registrar must also mail a preliminary notice at least 60 days before any refusal or suspension takes effect.

CDTFA is authorized to prescribe, adopt, and enforce regulations relating to the administration and enforcement of the new license suspension provisions.

REQUIREMENT

Installment payment agreements with the State Board of Equalization or CDTFA must now be in writing to qualify for the exemption from license suspension.

All contractor license applications must include an authorization allowing the Franchise Tax Board and CDTFA to disclose tax information needed for the registrar to administer the license suspension provisions. Both agencies may audit these authorizations.

TECHNICAL

The original property tax amendment (Revenue and Taxation Code Section 50) was renumbered from Section 1 to Section 2 and received minor grammatical corrections (removing redundant 'which that' phrasing).

FISCAL

Fiscal committee review changed from 'no' to 'yes', indicating the bill now has fiscal implications requiring committee review.

Floor votes · Senate May 7, 2026 · Assembly Aug 6, 2026

How they voted

36–0

Passed · 4 other

Total votes 40

May 7, 2026

D Democratic30

29 Yea 1

96% Yea

R Republican10

7 Yea 3

70% Yea

Vote distribution

All Yea All Nay Mixed No data

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Aug 17, 2026

Signed into law

Approved by the Governor.

legislature

Aug 6, 2026

Upper · Passed

In Senate. Ordered to engrossing and enrolling.

upper

Aug 6, 2026

Lower · Passed

Read third time. Passed. Ordered to the Senate.

lower

Jul 1, 2026

Lower · Passed

From committee: Do pass. (Ayes 11. Noes 0.) (July 1).

lower

Jun 23, 2026

Lower · Passed

From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (June 22). Re-referred to Com. on APPR.

lower

Jun 16, 2026

Lower · Passed

From committee: Do pass and re-refer to Com. on REV. & TAX. with recommendation: To consent calendar. (Ayes 17. Noes 0.) (June 16). Re-referred to Com. on REV. & TAX.

lower

May 18, 2026

Committee

Referred to Coms. on B. & P. and REV. & TAX.

lower

May 7, 2026

Upper · Passed

Read third time. Passed. (Ayes 36. Noes 0. Page 4167.) Ordered to the Assembly.

upper

May 4, 2026

Upper · Passed

From committee: Be ordered to second reading pursuant to Senate Rule 28.8 and ordered to consent calendar.

upper

Apr 22, 2026

Upper · Passed

From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 5. Noes 0. Page 4015.) (April 22). Re-referred to Com. on APPR.

upper

Apr 16, 2026

Upper · Passed

Read second time and amended. Re-referred to Com. on REV. & TAX.

upper

Apr 15, 2026

Upper · Passed

From committee: Do pass as amended and re-refer to Com. on REV. & TAX. (Ayes 11. Noes 0. Page 3840.) (April 13).

upper

Apr 8, 2026

Committee

Re-referred to Coms. on B. P. & E.D. and REV. & TAX.

upper

Apr 8, 2026

Committee

Re-referred to Coms. on REV. & TAX. and B. P. & E.D.

upper

Mar 23, 2026

Upper · Passed

From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS.

upper

Feb 26, 2026

Committee

Referred to Com. on RLS.

upper

Feb 18, 2026

Introduced

Introduced. Read first time. To Com. on RLS. for assignment. To print.

upper

1 primary · 0 co-sponsors